"When I evaluate the underlying fundamentals in the financial sector, I find myself ready to back up the truck," notes Louis Basenese, editor with The Oxford Club. Here he looks at a financial ETF.
"Recently GE shocked the world when it missed earnings expectations by seven cents because of difficulties in its financial services business, the seventh largest in the United States. Then Wachovia posted a worse-than expected $1.1 billion loss.
"Next was Washington Mutual which reported a $1.14 billion quarterly loss, worse than expected. And Merrill Lynch had a quarterly loss of $1.96 billion, also worse than expectations.
"Not to be outdone, the bottom of the line-up, regional banks (Comerica Inc., KeyCorp and PNC Financial Services Group) also struck out, reporting worse than expected first-quarter net income and/or mounting credit-loss provisions and net charge-offs.
"Remarkably, the Financial Select Sector SPDR (ASE: XLF) has barely budged. Indeed, its 15% higher than where it was when Bear Stearns collapsed.
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